A Maryland Senate committee is expected to approve a bill limiting to 5 percent the amount of bank stock that foreigners may buy. But state officials complained that if passed, the bill could scare away the foreign nonbank investors they have tried hard to attract.
With threats that the Free State's -- and possibly the country's -- money supply could be drained by Soviet, Arab or Japanese investors, some of the senators at the Economic Affairs Committee hearing today mirrored antiforeigner sentiments of other Americans resulting from recent worldwide crises.
"I suggest if they (foreigners) want to invest, give them Chrysler Corp.," said the bill's sponsor, Sen. James C. Simpson (D-Charles).
"I don't have any problem with them (foreigners) coming in and investing in stores or corporations," Simpson said after the hearing. "But banks, they can drain that thing overnight, siphon (the money) out. I'm not so sure it would happen, but with the conditions of the world, it's always that possibility."
"This bill has a lot of appeal to it. It's like a motherhood bill," said one of the bill's opponents, Thomas S. Saquella, an official of the state Office of Economic and Community Development.
Last year a similar bill was approved quickly by the Economic Affairs committee, which consists of the same members this year except for one person, according to the committee chairman, Harry J. McGuirk (D-Baltimore).The bill then was passed by the Senate and approved by the House Economic Matters Committee, but never made it to the House floor, Simpson said.
"I think we've got the votes to move it out of committee," Simpson said. "If it gets to the floor over there" -- meaning the House -- "it will pass."
Simpson introduced the bill following attempts last year by a group of Middle Eastern investors to buy control of Financial General Bankshares Inc. in an unfriendly takeover bid. The Middle Eastern group owns about 20 percent of the stock of Financial General, the holding company that controls 13 banks in the District, Maryland, Virginia, Tennessee and New York.
The Maryland bill would hurt psychologically foreigners seeking to invest in the state, Saquella said. The state recently embarked on a worldwide campaign to attract foreigners interested in building plants here that resulted in 15 firms planning to visit the state for possible locations, Saquella said.